Blog reader Ronb posted an idea that has a lot of merit: it is that of a contracting diagonal instead of an expanding diagonal. I decided to look at his idea a little differently, using closing only values of the S&P500 cash index to try to show its value. The daily close-only chart of SPX is below.
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| SPX Cash - Daily Close - Contracting Diagonal |
These are some of the merits of the idea: 1) the brief time spent in daily correction by the b waves is very interesting, 2) the count might explain some of the "impulse stopped here, no it didn't" nature of the upward c waves, 3) there are only about 42 days in the decline from the high. And while the EWO is on a low at wave 1, the MACD diverges on wave 3, so perhaps the EWO is providing a bit of a fake-out because the number of candles is not near 120 - 160, 4) the chart looks more like one Elliott would have been able to construct in his early days, meaning, 5) the clear overlap with wave 4 and wave 1 occurs on a closing basis. It does not do so for the expanding diagonal.
The implication of the chart is this: perhaps the decline might not be as significant as the expanding diagonal might suggest. What if on a closing basis we only nick below wave 3 ? Then, such a diagonal might still be valid even if the expanding variety does not work out.
The singular way to tell will be to measure the lengths of the entire waves (using OHLC, or candles) and see which length measurements turn out correct - if any do. We will advise as time progresses.
With thanks to reader Ronb for suggesting the idea.
Have an excellent rest of the weekend.
TraderJoe
Thanks to Ronb and TJ on this possible diagonal! Some current observations follow:
ReplyDeletehttps://www.mediafire.com/view/6yikzy7fj3v1cb6/ESstPnF-overlay.png/file
Correction - 4 box size is about .1% (not 1%), lol. Been looking at the SPY too long. 👀
DeleteHave just printed a 100% low pole, triggering DTBO.
DeleteI look at all of your updates and haven't said thanks.
ReplyDeleteSo thanks for another update.
Welcome, of course & likewise.
DeleteTJ
Gold - catapult still in play. Have just had a spread Quad (multi) top b.o.
ReplyDelete10ma still below 30ma on price. This [could] be a good spot for a bull trap. (just sayin')
DeleteBTC - current [if interested]
ReplyDeletehttps://invst.ly/xkzkg
Isn't c of 2 lower in price than a of 2? Does that matter? Thanks.
ReplyDelete. tiny truncation is all. Common in 'c' waves.
DeleteTJ
Seems like another falling wedge on ES 15 minute with the right number of candles.
ReplyDeleteES - pre-opening look
ReplyDeletehttps://invst.ly/xl6f-
Update - 100% high pole, triggering DBBO. Note: still above rising 45 TL.
Delete5 waves down in NQ 1 mins.
ReplyDeletehttp://tos.mx/rgnLp3T
Good morning. SPY cash 15-min currently has five-waves-down with v = i; can go further if it wants.
ReplyDeletehttps://www.tradingview.com/x/eE79szMQ/
TJ
What are the odds that 5-waver is c wave of ii (with i preceeding rally off the Feb 24 lows?) In cash indexes.
Delete..odds not good until / unless upward retrace exceeds 78.6%. (Not trading or investment advice).
DeleteTJ
ES - Sprd TBBO, new low.
ReplyDeleteOf note: I have 4 confluent measures in the 4184-96 area.
DeleteES 30-min: broken the fractal of the overnight low.
ReplyDeleteTJ
ES 30-min: here is the usual intraday wave-counting screen. Note, fractals at the low are at the S2 potential support.
ReplyDeletehttps://www.tradingview.com/x/IFEjEmdo/
Currently, the intraday bias is lower, as is the daily bias with price under the 18-day SMA, and 18-period SMA (30 min). First thing the bulls need to do would be do close two candles over the intraday 18-period. We're not there yet.
TJ
ES - update just triggered another DBBO (new low). On watch for poss. bear trap.
ReplyDeletehttps://invst.ly/xl9u2
DeleteTBBO. Still looking for the poss. bear trap for low of some degree.
DeleteSPY30 - (bars) Measures for assumed 5th
ReplyDeletehttps://www.mediafire.com/view/kejkpptvoe057ze/SPY30.PNG/file
SPY has reached the 1.618 for 5th vs 1st.
DeleteES 30-min; possible triangle & now lower low. Note how the Slow stochastic on this time frame goes 'embedded' just like its 'big brother' the daily time frame. So, until/unless the slow stochastic goes back up over 20, the odds favor the down side. The chart is behind about 10-min and does not show the new low.
ReplyDeletehttps://www.tradingview.com/x/t8Jk3ndp/
TJ
ES - update
ReplyDeletehttps://invst.ly/xlavn
TJ,
ReplyDeleteDoes the A wave(207 so far) of 5 have to be shorter than the A wave(215) of wave 3? Or is it the total of the whole move lower should be less than wave 3?
Thanks,
..which diagonal type are you referring to? expanding or contracting?
DeleteTJ
Based on our LD diagonal idea. Does it matter if the A wave in wave 5 is longer than the A wave in wave 3. Or does it just matter what the total move of wave 5. Right now the wave A is longer than the wave 3 A wave. Or we're in the C wave. The ES is very messy but you could say the rally into the opening could be the B wave. But that doesn't work in the SPX.
Deletehttps://www.tradingview.com/i/9PAPGMxO/
In the contracting variety, A only needs to be shorter than all of 3. Also, see the next day's post. The expanding variety is 'not' ruled out yet, and is posted along side (below) it.
DeleteTJ
Thanks,
Delete6th day in row daily CL closing above the upper BB.
ReplyDeleteDitto USO.
ReplyDeleteES daily - just fyi - price nearing lower daily Bollinger Band. The band was at 4,186 and it was hit; then moved lower to 4,181. Something to keep an eye on.
ReplyDeleteTJ
ES - reached the bottom of confluence area (4184). (if SPY were still trading, would put it at the 2.00 fib (w5 vs w1).
ReplyDeleteA new post is started for the next day.
ReplyDeleteTJ